Hidden Costs of Corporate Relocation: Protecting Your Assets

Through careful planning and vetting potential relocation service providers, companies can minimize hidden costs and maximize the opportunity of a business move.

Mike Gonzalez, President, Armstrong Relocation (2011 Directory)

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Expense. Organizational upheaval. Logistical challenges. These are just a few words that arise when discussing a business relocation. Moving a facility can be an exciting time brimming with opportunity, or a frustrating burden. While straightforward tactics contribute to the overall expense of relocation, cost-conscious companies should know several important strategies, especially when moving long distances.

Moving doesn't have to cause a migraine. Fundamental planning principals that factor in multiple variables can position an organization for a fresh start with potential for growth.

A company must consider two distinct components for any relocation. It must begin with a comprehensive plan to move both the personnel and the business operation, in which the company and relocation partner collaborate. The transfer of employees and their families, coupled with the wholesale move of a facility, are complex matters that must be scrutinized closely to avoid excessive spending.

Moving PersonnelCorporate Productivity Drains - When transferring employees and their families, relocation decisions aim to reduce administrative burdens on an organization and bolster its resources to preserve cash flow. Although maintaining a thrifty mindset is in the company's best interest, it can prove disastrous.

A lump-sum payment for relocation may seem to be the most efficient way to convince employees to move. However, as they slowly follow their company to a new destination, lost productivity can hurt the employer.

In an ideal situation, the employee will accept the payment and research the relocation outside of business hours. But this is rarely the case. Typically, the employee becomes consumed with the relocation process, spending countless hours on the phone and Internet analyzing moving companies, contacting realtors, and searching for a new home, all on company time. This can cost the company due to the distractions of handling relocation. Companies cannot afford to take this risk.

Multiply one employee by a hundred, and the profit and productivity loss is immense. The employee himself or herself is another casualty of the process. Some companies can encounter unforeseen worker's compensation claims if employees decide to pocket some of the cash, rent their own moving vehicle, and injure themselves.

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The right relocation strategy can avert these situations. By investing in a comprehensive solution for employee relocation, business leaders can minimize lost productivity and maximize the relocation process.

Overwhelming the Administration - Expecting human resources to carry the load can set an organization back. For a complex relocation, merely issuing an internal HR handbook to guide the move is insufficient for the employee and the company. Relocation requires a degree of handholding to ensure smooth execution, which can only be provided by an experienced relocation partner.

Without appropriate processes in place, calls and e-mails can inundate HR departments from confused, agitated employees. Who can blame them? They don't understand the process, don't have any explanation from their supervisors, and want to save time and money. Unless employees are educated in selecting a relocation provider, buying a home remotely, and coordinating travel, the process can overwhelm.
Many downsized HR departments cannot handle the additional workload of a long-distance relocation. Whether due to a lack of experience or bandwidth within HR, relocations can cost thousands of extra dollars to overcome the administrative shortfall.

Moving the FacilityA Strategic Approach - Hidden costs come into play when relocating an entire operation. A lack of planning before, during, or after relocation can dramatically affect the final bill. Relocation begins before the first box is packed.

What are some warning signs companies should heed when selecting a relocation provider?

It boils down to the old adage, "If it sounds too good to be true, it probably is."More
- Mike Gonzalez, President, Armstrong Relocation

How can a company turn around a relocation that is going sour?

From a corporate perspective, if it is apparent that a relocation is going bad, it is important to involve leadership executives and/or senior managers from the relocation provider as soon as possible.More
- Mike Gonzalez, President, Armstrong Relocation